The five countries bordering the Caspian Sea have agreed a framework treaty in Iran aimed at halting further damage to the sea's fragile environment.

The United Nations-sponsored deal involving Azerbaijan, Iran, Kazakhstan, Russia and Turkmenistan seeks to reduce the amount of sewage and industrial waste pumped into the sea.

It also ends nearly 10 years of quarrelling over its oil and gas reserves.

In New York, UN Secretary-General Kofi Annan hailed the signing as "a significant step forward for the region".

"By signing this important new treaty the Caspian states are demonstrating their firm commitment to saving the beautiful and resource-rich Caspian Sea," Iranian Vice President Masoumeh
Ebtekar said.

World Bank deal

Toxic waste dumping, oil leaks, agricultural run-off, and over-fishing of the caviar-producing sturgeon fish, have all contributed to the Caspian's serious ecological decline.

The sea is soon set to be one end of a pipeline which will transport Central Asian oil to Europe.

The World Bank has approved loans of just over $300m to help the ongoing construction of the pipeline which will run from an oil field off the coast of Azerbaijan, through Georgia, to the Turkish Mediterranean port of Ceyhan.

It is said to be the longest of its kind in the world.

Engineers have carried out nearly 40% of the work, and the first crude oil is expected to flow in 2005.

The World Bank has said possible risks of the pipeline to the environment have been addressed.